Gov. of Canada Real Return Bonds

Real Return Bonds are fully guaranteed by the Government of Canada and are available for terms up to 28 years. The rate of return is adjusted for inflation according to the Consumer Price Index, making them very attractive to investors.

They are available for purchase starting at face values of $1,000. They may be sold at any time, but if redeemed early, the investor does not receive the inflation-adjusted amount of principal. Interest payments are calculated as an amount equal to the inflation-adjusted principal multiplied by the interest rate. Interest is paid June 1st and December 1st.

This form of bond is also eligible for RRSPs and RRIFs. Real Return Bonds are available for purchase through banks and investment dealers.

Bonds with the highest credit ratings are assigned an AAA or equivalent rating. Interest rates offered on such bonds will be among the lowest of all bonds. As the credit rating declines, interest rates rise, so that the highest rate of interest is offered on bonds that are considered below investment grade. These include the bonds at the bottom of the creditworthiness scale, which are known as” junk bonds,” because that is essentially what the investor is buying and that’s all he or she may end up owning.

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Best GIC Rates

1 Year 1.05%
2 Year 1.35%
3 Year 1.85%
4 Year 2.00%
5 Year 2.05%

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